Endogenous growth with addictive habits

Augeraud-Veron, Emmanuelle; Bambi, Mauro

Abstract

In this paper, we investigate the global dynamics of an endogenous growth model with linear technology and addictive habits. We find feasible parameters’ conditions under which: (a) the resulting equilibrium consumption path is steeper than in a standard AK model; (b) endogenous fluctuations in the form of damping fluctuations around the balanced growth path emerge; (c) the Easterlin’s paradox emerges. The relevance of these results is explained comparing our findings with the results already known in the existing literature.

Citation

Augeraud-Veron, E., & Bambi, M. (2015). Endogenous growth with addictive habits. Journal of Mathematical Economics, 56, 15-25. https://doi.org/10.1016/j.jmateco.2014.11.002

• Journal Article Type: Article
• Acceptance Date: Nov 23, 2014
• Online Publication Date: Dec 3, 2014
• Publication Date: Jan 1, 2015
• Deposit Date: Aug 2, 2018
• Publicly Available Date: Sep 24, 2018
• Journal: Journal of Mathematical Economics
• Print ISSN: 0304-4068
• Electronic ISSN: 1873-1538
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 56
• Pages: 15-25
• DOI: https://doi.org/10.1016/j.jmateco.2014.11.002
• Public URL: https://durham-repository.worktribe.com/output/1324716